Do I hv to report 1099K frm paypal 4 selling usd projector to individual for $3105 thn bought for $3299, if yes, wht r the steps for TT delux or? Is this loss taxable?

[rajeevgupta-leo]

I originally purchased a projector from Indiegogo kept few months and then sold it to an individual, he paid me through paypal in two transactions - firstly used projector transaction amount $2900 and another transaction for shipping fees $305 which gave a total of $3205, out of which paypal deducted seller fees from this overall two transactions $86.71 + $9.12 = $95.83 giving me back net amount $3109.17, out of which I further paid fedex shipping $129.69 and I got final amount of $2979.48 in my pocket and I originally purchased this as new projector for $3299 in year 2022, hence sold it for a loss of amount -319.52$, So, I sold it for a loss or less money. I have all the fedex receipts, original projector online receipt as well. Please advise and guide me with the steps once the paypal would generate the 1099K for this transaction, how to report it in Turbo Tax online deluxe or higher version so that I do not have to pay taxes on this transaction which was actually a personal item sold for less and incurred a loss on this resell of a personal item. Thanks in advance.

[tagteam · Accepted solution]

If you do not sell, or resell, items such as this as a business then it is a capital asset in your hands and the transaction is the sale of property held for personal use.

As such, you cannot deduct a loss and can either report the sale as the sale of a capital asset (much in the same way as you would report the sale of a security, such as a stock, bond, or mutual fund) or not report it at all. Either way, you cannot recognize a capital loss on the sale of property held for personal use.

[rajeevgupta-leo]

Thanks @tagteam for your reply, This was NOT business transaction and it was between individual to individual and since this was a personal item I purchased for myself and then sold it for less as it was used, so it will generate 1099K as it was above 2022 threshold of $600, so I would still have to report it in TurboTax but in the cost offset I will have to put the cost of the item as it was originally purchased for more and sold for less which will make it effectively 0 with no tax implications on my return? Am I correct? Please advise and clarify if I am not correct. Thanks once again.

[tagteam · Accepted solution]

Yes, there will be no tax liability on this transaction (since you sold a personal-use item at a loss).

[rajeevgupta-leo]

Thanks @tagteam for your prompt response. Much appreciated. But I will still have to report 1099K from Paypal when received when filing my returns for the year 2022 in 2023?

[tagteam · Accepted solution]

Probably best to report it to avoid some sort of mismatch. Either way, it will not hurt to report it.

[rajeevgupta-leo]

Thanks @tagteam for your guidance. Appreciate it. Well deserved CHAMP badge on you.